Illinois schools say pension shift would undo funding revamp

On Feb 15, 2018

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By Sarah Zimmerman
Associated Press

SPRINGFIELD — Public school administrators who just last summer were ecstatic over a promise of equitable state financing in a revamped education funding formula were disheartened Thursday by Gov. Bruce Rauner’s proposal to unload more costs onto local districts, which they said could lead to higher property taxes.

The Republican governor proposed a $696 million savings to the state’s bank account by shifting the employer portion of teachers’ pension contributions to local districts over four years. Generally, employees pay 9 percent of their salaries and this year, the state is paying 10 percent of what’s owed for the year.

Schools argue that picking up the tab would have devastating effects and exacerbate inequity, which last year’s funding change aimed to end. Educators said it would undo many of the effects of that evidence-based funding model, which gives needier districts extra money for educational services.

“The governor just poured water on our campfire,” said Tony Sanders, CEO of Elgin School District U-46. He said that if his district — the state’s largest outside Chicago — doesn’t raise property taxes, it would have to cut programs just to “make ends meet.”

Rauner’s justification for the shift is that if pension costs were paid by local governments, they’d have incentive to reduce the burden. But Ben Schwarm, executive director of the Illinois Association of School Boards, said pensions are set by the Legislature, not school districts.

Illinois schools are primarily funded through local property taxes. Historically, school districts in areas with higher property wealth receive more money in taxes than districts in impoverished communities. That setup has led to the largest school funding gap in the nation.

The funding law prioritizes state money to needier districts. Rauner, who initially vetoed the measure, now touts it as a crowning achievement.

“For a man who seized upon school funding reform as his greatest accomplishment as governor, he certainly does not seem inclined to make sure the new formula is given a chance to work,” said Democratic Sen. Andy Manar of Bunker Hill, who sponsored the funding overhaul.

“Once again, the governor’s rhetoric failed to match reality,” said state Sen. Steve Stadelman, D-Rockford. “He says he wants to reduce property taxes, but today’s proposal will result in a significant property tax increase on Rockford families.”

Chicago Public Schools CEO Janice Jackson had a unique reason to resist the plan. Until this year, Chicago schools paid the employer portion of teacher pensions but in the funding remake, the state took on the city’s share.

“Our state made historic progress just six months ago, and we cannot go backwards,” Jackson said in a statement. “The families, educators and courageous lawmakers who fought so hard to achieve fair funding will not allow their hard-earned progress to be reversed.”

Rauner promised to follow up with legislation giving schools “the tools they need to more than offset the costs.” In the past, he has proposed restrictions on collective bargaining by local government employees, which Democrats don’t support.

Sanders said his plans to use additional money from the funding revamp for new technology and educational programs would likely stay on the drawing board if Rauner has his way.

“We finally got to a place to provide the resources our children need,” he said. “And the budget address just pulled it all away.”